830 Words Short Essay on world oil crisis
Answers
During the Fourth Arab-Israel War in October, 1973, the Arab oil-producing countries employed for the first time a novel method to put economic pressure on the western countries like the U.S A., U.K., France, Holland and Germany which had been supporting the cause of Israel. The Arab countries decided to use crude oil as a political weapon. They not only cut down its production but also raised its prices several times.
The price of crude oil, which was selling at two dollars per barrel during the early part of 1973 before the Arab-Israel War, was sold at 30 dollars per barrel after the price hike. This sudden and unprecedented hike in oil prices created a scarcity of oil in the world market.
The shortage of oil of 1974 led to inflationary tendencies all over the world. It plunged many countries into an economic crisis. Their financial condition became precarious. Many countries in the West introduced economy in the use of petrol and resorted to petrol rationing.